If you are buying an insurance policy, or making a claim on an existing policy, take steps to protect yourself. By understanding the details of your policy before you buy it, and then gathering appropriate information when you have a claim, you can increase your chances of a successful outcome. Here's how. (For information on resolving disputes with your health insurance company, see Nolo's article Health Plan Disputes: An Overview.
Before You Buy
Always take careful notes when you buy an insurance policy. Write down what the insurance agent tells you about the coverage you are buying. Save your notes in a file with your policy. Also save any promotional material you are given or shown when you buy the policy.
Insist on reading the completed application form yourself instead of allowing the agent to read it to you. Be certain that your answers are truthful, thorough, and complete. If they're not, it could come back to haunt you. The insurance company can rescind your policy entirely -- after you make a large claim -- if it finds some basis for asserting that you misrepresented a significant fact on the application.
Before you buy the policy, insist on seeing it. Make sure that you really understand key points -- things like deductibles, exclusions, and limitations.
When You Have a Claim
Now is the time to get out all those papers you saved so carefully. Review your policy and notes before you speak with a company representative. Make sure you understand the complex coverage, exclusion, and limitations provisions to lessen the likelihood of saying something that the company could twist into a basis for denying the claim.
Start gathering materials to help you prove your claim. Photograph your loss and keep records of it. For example, if you are making a claim based on fire and smoke damage to your business or residence, you should photograph the fire-damaged areas and items before they are repaired or discarded.
What Not to Do
A policyholder should never do any of the following:
- exaggerate any aspect of a claim
- accept the insurance company's expert's evaluations of the losses without getting an independent expert's estimates
- submit to an "examination under oath" by the company without first obtaining legal advice, or
- sign an insurance company release or check without verifying that the amount is full and correct.
Keep a Log
It's a good to start a log concerning your claim. Write down the date, the time, and a summary of every telephone or written communication with company representatives. Note the name, title, and direct telephone number of every person with whom you have contact.
This is important because insurance companies often switch adjusters on claims, sometimes more than once. You'll need evidence of what was said or done when, and by whom, throughout the handling of the claim. Among other things, keeping such notes can make it more difficult for the insurer to blame any delay on you.
If a Dispute Arises
A few legal rules are on your side when it comes to deciphering a policy. If a dispute over what should be covered goes to court, the coverage provisions will be construed broadly (in your favor), whereas the limitations and exclusions will be interpreted narrowly (in your favor). And because the company wrote the policy, any ambiguities in it will be interpreted in your favor and against the company. The goal of a court will be to honor your reasonable expectations.
For answers to hundreds of legal questions that individuals and families encounter every day, get Nolo's Encyclopedia of Everyday Law, by Shae Irving and the Nolo editors.